Bears on the Run

Back in the early 1990’s Paul McCartney and his then band, Wings had a popular hit named “Band on the Run.” While there was nothing particularly insightful in the lyrics, at least as pertains to the grain/soy markets, but the action of late could possibly be labeled “Bears on the Run.” Makes for a catchy little tune to recite in your head if nothing else. By no means has all buying that has occurred in the grain and soy markets as of late been short-covering and it would appear that indeed, we are finally seeing investment money flow away from equities and into undervalued commodities, but as already reflected on the previous Commitments of Traders Reports, large specs have been coming away from the short side in a big way, and I suspect that trend has continued this week. The corn market grabbed the upside leadership torch yesterday, posting an outside higher reversal and carrying this market to the highest levels traded since November and seems intent on forging higher again this morning. While all of this has been encouraging and to borrow a liturgical phrase, I believe is a “foretaste of the feast to come”, let’s not lose sight of the fact that we are pressing into a stiff level of resistance and already have this market quite overbought, so to think we can extend significantly more at this time of the year, would seem a bit optimistic.

We do have a little news to absorb tomorrow in the form of the February Supply/Demand reports. Granted, the February report is often one of those easy to overlook as the only real changes, at least of significance, would center on South American crops and the trade is more interested in looking out to the information that will be published at the annual USDA Ag Outlook Forum which will be held on the 22nd/23rd of this month. Regardless, we do have trade estimates for tomorrow’s release that break down as follows; Domestic corn ending stocks 2.468 billion (-9mil.), beans 486 million ( 16mil.) and wheat at 990 million ( 1mil.). World corn ending stocks at 204.66 MMT (-1.91MMT), beans 98.61 MMT ( .04MMT) and wheat 267.8 MMT (-.22MMT). Argentine beans production is estimated to be 54.06 MMT (-.94MMT) and corn of 40.68 (-1.32MMT) with Brazilian beans expected to come in at 111.2 MMT ( 1.2MMT) and corn at 93.73 MMT (-1.27MMT).

Of course, we do have the weekly export sales to be released tomorrow morning as well and should see solid numbers for corn yet again.

For those keeping track for crop insurance purposes, the average prices for the month of February thus far are 3.92 for December corn and 10.00 for November Soybeans.